If Company A has a higher net operating profit margin (NOPM) than Company B, then Company A's RNOA will be higher.

Question

Quizplus · Accepted Answer

RNOA (Return on Net Operating Assets) is influenced by both the net operating profit margin (NOPM) and the efficiency of asset use (measured by the net operating asset turnover). A higher NOPM does not guarantee a higher RNOA if Company A has significantly lower asset turnover compared to Company B.

If Company a Has a Higher Net Operating Profit Margin